As used in sections 4 through 7 of this act:
Beginning on the date that production, processing, and testing equipment are first in operation, sales of natural gas and electricity to a qualified manufacturer of steel that is certified under Section 5 of this act shall be exempt from the gross receipts tax levied by the Arkansas Gross Receipts Act of 1941, Arkansas Code § 26-52-101, et seq., the Arkansas Compensating Tax Act of 1949, Arkansas Code § 26-53-101 et seq., and any other state or local tax administered under those acts.
AMENDMENT 82 AGREEMENT
Between
THE STATE OF ARKANSAS
And
BIG RIVER STEEL, LLC
Dated as of
MARCH __________________, 2013
AMENDMENT 82 AGREEMENT
THIS AMENDMENT 82 AGREEMENT ("Agreement") is made and entered into by and between the State of Arkansas (the "State"); and Big River Steel, LLC, a limited liability company organized pursuant to the laws of the State of Delaware (the "Sponsor").
W-I-T-N-E-S-S-E-T-H
For valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:
"Act" shall mean and refer to the Arkansas Amendment 82 Implementation Act, A.C.A. § 15-4-3201 et seq., as amended through 2012.
"Actual Project Capital Expenditures" shall mean and refer to the total of:
"Advantage Arkansas Agreement" shall mean and refer to a Financial Incentive Agreement with the State for job creation tax credits as required pursuant to A.C.A. § 15-4-2705.
"Advantage Arkansas Program" shall mean and refer to the job creation tax credit program established by the Consolidated Incentive Act.
"Agreement" shall mean and refer to this Amendment 82 Agreement.
"Amendment 82" shall mean and refer to Amendment 82 to the Constitution of the State of Arkansas of 1874.
"Amendment 82 Financing" shall mean and refer to the funds to be provided by the State to, or for the benefit of, the Sponsor pursuant to the Grants and the Incentive Loan and the funds allocated to the reasonable and necessary closing costs and expenses of the State.
"Amendment 82 Requirements" shall mean and refer to the provisions of Amendment 82 and the Act, and other requirements imposed by legislation approving this Agreement.
"Announced Controlling Party" shall mean and refer to the Person who shall be proposed to be the successor to the Sponsor with respect to the Project following a Change of Control Event.
"Authority" shall mean and refer to the Arkansas Development Finance Authority or any other agency of the State which succeeds by statutory enactment to the rights and obligations assigned to the Authority pursuant to this Agreement.
"Bonds" shall mean and refer to the general obligation bonds issued by the State pursuant to the Amendment 82 Requirements in an amount not exceeding One Hundred Twenty-five Million Dollars ($125,000,000.00) for the Amendment 82 Financing.
"Capital Commitments" shall mean and refer to:
"Capital Commitment Documents" shall mean and refer to any documents evidencing the Capital Commitments and any such other documents, records, and other information as are reasonably necessary to describe the nature, terms and conditions, and amount or value of the Capital Commitments.
"Change of Control Event" shall have the meaning set forth in the Inter-Creditor Agreement that, when taken as a whole, is no less favorable to the State than a definition which includes the following events:
"Chief Fiscal Officer" shall have the meaning set forth in the Act.
"Closing Date" shall mean and refer to the date of the issuance of the Bonds.
"Commission" shall mean and refer to the Arkansas Economic Development Commission or any other agency of the State which succeeds by statutory enactment to the rights and obligations assigned to the Commission pursuant to this Agreement.
"Compensation Target" shall mean and refer to an average annual compensation with respect to the Direct Positions and Independent Direct Positions designated by the Sponsor of Seventy-five Thousand Dollars ($75,000.00) per year, excluding any non-cash benefits.
"Confidential Business Information" shall have the meaning set forth in Section 15.
"Consolidated Incentive Act" shall mean and refer to the Consolidated Incentive Act of 2003, A.C.A. § 15-4-2701 et seq., as amended.
"Department" shall mean and refer to the Arkansas Department of Finance and Administration.
"Development Plan" shall mean and refer to the plans attached to Exhibit 1.
"Direct Positions" shall mean and refer to those employees:
"Employment Target" shall mean and refer to at least five hundred twenty-five (525) New Full Time Positions through either Direct Positions or Independent Direct Positions at the Facility or on the Project Site.
"Escrow Account" shall mean and refer to any interest earning escrow account administered by the Escrow Agent pursuant to an Escrow Agreement.
"Escrow Agent" shall mean and refer to any Person appointed by the State as an escrow agent with respect to funds or items to be held or disbursed by the State pursuant to the terms and conditions of this Agreement.
"Escrow Agreement" shall mean and refer to any escrow agreement with any Escrow Agent.
"Exhibit" shall mean and refer to an exhibit specifically referred to in this Agreement that shall be either attached to this Agreement or delivered by a Party in conjunction with the execution and delivery of this Agreement.
"Facility" shall mean and refer to the Mini Mill steel manufacturing facility and all related buildings and infrastructure to be acquired, developed, constructed, and operated at the Project Site as generally described in the Development Plan.
"Financial Incentive Agreement" shall mean and refer to the financial incentive agreements described in the Consolidated Incentive Act.
"Full Time Position" shall mean, when referring to a position or job, a position or job filled for at least nine (9) months during a calendar year with an average of at least thirty (30) hours of work each week.
"General Assembly" shall mean and refer to the Senate and the House of Representatives of the State.
"Governmental Authority" shall mean and refer to any executive, legislative, or judicial branch, or any agency, department, board, commission, council, court, tribunal, official, task force, or other authority exercising governmental powers of the United States of America or the State.
"Governor" shall mean and refer to the Governor of the State.
"Grants" shall mean and refer collectively to the cash grant for Qualifying Site Preparation Costs as described in Section 6.2 and the cash grant for Piling Costs as described in Section 6.3.
"Incentive Loan" shall mean and refer to the loan of money as described in Section 6.4.
"Incentive Loan Collateral" shall mean and refer to that part of the Infrastructure described in Exhibit 2 and all accessions, substitutions, and replacements thereto or thereof, whether now owned or hereafter acquired and all proceeds thereof whether of the same or different class.
"Incentive Loan Documents" shall mean and refer to the promissory note, security agreement, mortgage, financing statement, fixture statement, and other documents entered into between the Authority and the Sponsor with respect to the Incentive Loan.
"Independent Direct Positions" shall mean and refer to those employees and independent contractors of Non-related Entities who shall be designated by the Sponsor and who hold Full Time Positions at the Facility or on the Project Site with the primary objective of providing any of the following products and services necessary to the operation, maintenance, or repair of any part of the Project:
"Infrastructure" shall mean and refer to the buildings, fixtures, machinery, and equipment acquired, developed, constructed, and operated at the Project Site and includes the Facility.
"Infrastructure Costs" shall mean and refer to the costs and expenses paid or incurred by, on behalf of, the Sponsor with respect to the acquisition, development, construction of the Infrastructure at the Project Site, but shall not include any amounts paid by or received from the City of Osceola, Arkansas or Mississippi County, Arkansas.
"Inter-Creditor Agreement" shall mean and refer to the inter-creditor agreement among the Authority and all Senior Term Lenders to the Project and all other Persons who may claim any interest in the Incentive Loan Collateral and certain other Persons.
"Investment Requirement" shall mean and refer to the obligation of the Sponsor, as described in this Agreement, to make a minimum capital investment of One Billion Twenty-three Million Five Hundred Ninety Thousand Dollars ($1,023,590,000.00) in Actual Project Capital Expenditures.
"Investment Threshold" shall mean and refer to the investment by the Sponsor of a minimum of Two Hundred Fifty Million Dollars ($250,000,000.00) in Actual Project Capital Expenditures for the use and benefit of the Project at the Project Site.
"Joint Marketing Agreement" shall mean and refer to the joint marketing agreement to be entered into between the Commission and the Sponsor prior to the Closing Date.
"Letter of Commitment" shall mean and refer to the letter of commitment entered into pursuant to the Amendment 82 Requirements between the Commission and the Sponsor as of January 28, 2013.
"Mini Mill" shall mean and refer to the steel manufacturing facility to be acquired, developed, constructed, and operated at the Project Site as generally described in the Development Plan.
"New Full Time Position" shall mean and refer to a permanent Full Time Position at the Facility or the Project Site that was created after the date of this Agreement.
"Non-related Entity" shall mean and refer to any Person that shall not meet the definition of a Related Entity.
"Office of Economic and Tax Policy" shall mean and refer to the Office of Economic and Tax Policy of the Arkansas Bureau of Legislative Research.
"Party" shall mean and refer to either or both of the State and the Sponsor.
"Person" shall mean and refer to any Party, individual, entity, corporation, company, association, limited liability company, joint venture, general partnership, limited partnership, organization, Governmental Authority, revocable trust, irrevocable trust, estate, personal representative, executor, trustee, receiver, liquidator, or other person.
"Piling Costs" shall mean and refer to those Qualifying Site Preparation Costs directly related to that part of the Facility on which the Mini Mill shall be situated and that shall be necessary for subsurface stabilization of the Mini Mill. "Piling Costs" include costs and expenses related to piling, subsurface stabilization, engineering, grading, footers, dewatering, excavation and foundation preparation, all installation, material and labor costs and expenses directly related to the foregoing, and all other necessary subsurface stabilization costs and expenses incidental to the Piling Costs.
"Position Creation Requirement" shall mean and refer to the obligation of the Sponsor, as described in this Agreement, to achieve and maintain the Employment Target and the Compensation Target.
"Preliminary Period" shall mean and refer to a term of thirty-six (36) months commencing on the Closing Date and continuing until the third anniversary thereof.
"Project" shall mean and refer to the acquisition, development, construction, and operation of the Facility at the Project Site in a manner that shall satisfy the Investment Requirement and that shall achieve and maintain the Position Creation Requirement.
"Project Site" shall mean and refer to the location of the Project in Mississippi County, Arkansas as described in Exhibit 3.
"Qualified Amendment 82 Project" shall have the meaning set forth in the Act.
"Qualifying Site Preparation Costs" shall mean and refer to the following costs and expenses of the Project at the Project Site: removal of trees, removal of structures, site clearing activities, grubbing, grading, environmental remediation costs, excavation and other earthwork, fill dirt, compaction, erosion control, installation of drainage and storm water detention, fencing, installation of temporary and permanent internal roads, footers and building foundations, on-site rail installation, on-site public infrastructure improvements or construction, engineering costs, and any other costs and expenses incidental to the Project that shall be eligible for Amendment 82 Financing and that shall be approved by the State.
"Recycling Credit Legislation" shall mean and refer to an act to extend the carry-forward of the income tax credit pursuant to the Recycling Equipment Tax Credit Program from three (3) years to fourteen (14) years for steel mills that newly invest at least Five Hundred Million Dollars ($500,000,000.00) in connection with a facility located in the State of Arkansas and that create at least three hundred (300) New Full Time Positions paying an annual average wage of at least Seventy Thousand Dollars ($70,000.00).
"Recycling Equipment Tax Credit Program" shall mean and refer to the program with such name established under A.C.A. § 26-51-506.
"Related Entity" shall have the meaning set forth in A.C.A. § 15-4-3202(24) (2011 Revision).
"Repayment Calculations" shall mean and refer to the formulae set forth in Section 11 and Section 14 to be used if the Sponsor shall fail to satisfy the Investment Requirement and to achieve and maintain the Position Creation Requirement as set forth in this Agreement.
"Repayment Penalties" shall mean and refer to the penalties payable by the Sponsor as determined by the Repayment Calculations.
"Request for Disbursement" shall mean and refer to a request by the Sponsor with respect to a disbursement of the Grants or the Incentive Loan in the form to be reasonably approved by the State and the Sponsor.
"Senior Term Lenders" shall mean and refer to those senior secured term lenders to the Project who shall be required to join as a party to the Inter-Creditor Agreement, as reasonably determined by the Authority and the Sponsor.
"Sponsor" shall mean and refer to Big River Steel, LLC, a limited liability company organized pursuant to the laws of the State of Delaware.
"State" shall mean and refer to the State of Arkansas.
"Tax Back Program" shall mean and refer to the investment tax incentives program established by the Consolidated Incentive Act at A.C.A. § 15-4-2706.
"Termination Date" shall mean and refer to June 30, 2014.
"Test Date" shall mean and refer to the date on which the Preliminary Period shall expire and the anniversary of such date during each year of the Testing Period.
"Testing Period" shall mean and refer to a term of fifteen (15) years commencing upon the expiration of the Preliminary Period and continuing until the eighteenth (18th) anniversary of the Closing Date.
"Training Agreement" shall mean and refer to the training agreement to be entered into between the Commission and the Sponsor with respect to the assistance to be provided by the Commission to the Sponsor in the recruitment and training of employees and independent contractors.
"Utility Tax Legislation" shall mean and refer to an act to provide a full exemption of state sales taxes associated with the sale of natural gas and electricity for use directly in the manufacturing process of steel mills that newly invest at least Five Hundred Million Dollars ($500,000,000.00) and create at least three hundred (300) New Full Time Positions paying an annual average wage of at least Seventy Thousand Dollars ($70,000.00).
If to the State: | Office of the Governor State Capitol Room 250 Little Rock, Arkansas 72201 |
AND | |
Office of the Attorney General 323 Center Street, Suite 200 Little Rock, Arkansas 72101 | |
AND | |
Arkansas Department of Finance and Administration Office of the Director 1509 West Seventh Street, Suite 401 Little Rock, Arkansas 72203-3278 | |
AND | |
Arkansas Economic Development Commission Attn: Executive Director 900 West Capitol Avenue, Suite 400 Little Rock, Arkansas 72101 | |
AND | |
Arkansas Development Finance Authority Attn: President 900 West Capitol Avenue, Suite 310 Little Rock, Arkansas 72101 | |
If to the Commission: | Arkansas Economic Development Commission 900 West Capitol Avenue, Suite 400 Little Rock, Arkansas 72101 |
AND | |
Arkansas Economic Development Commission Attn: Bryan Scoggins 900 West Capitol Avenue, Suite 400 Little Rock, Arkansas 72101 | |
If to the Authority: | Arkansas Development Finance Authority Attn: President 900 West Capitol Avenue, Suite 310 Little Rock, Arkansas 72101 |
If to the Sponsor: | Big River Steel, LLC Attn: Mr. John Correnti Chairman and Chief Executive Officer 1425 Ohlendorf Road Osceola, Arkansas 72370 |
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EXECUTED and DELIVERED as of March __________________, 2013.
THE STATE
THE STATE OF ARKANSAS
__________________
: Governor, Mike Beebe
__________________
By: President Pro Tempore of the Senate,
Michael Lamoureux
__________________
By: Speaker of the House of Representatives,
Davy Carter
__________________
: Chief Fiscal Officer and Director of the
Department of Finance and Administration,
Richard Weiss
__________________
By: Director of the Arkansas Economic
Development Commission,
Grant Tennille
__________________
By: President of the Arkansas Development
Finance Authority, Mac Dodson
THE SPONSOR
BIG RIVER STEEL, LLC
__________________
By: Chairman and Chief Executive Officer,
John Correnti
EXHIBIT 2
INCENTIVE LOAN COLLATERAL
Hot Mill Complex Buildings Including Siding, Roofing, Roof Monitors, Mandoors, Overhead Doors and Grouting | |
001 | Meltshop |
002 | Tunnel Furnace Building |
003 | Hot Mill / Roll Shop Building |
Total | $44,100,000 |
Cold Mill Complex Buildings Including Siding, Roofing, Roof Monitors, Mandoors, Overhead Doors and Grouting | |
Total | $30,000,000 |
Total Collateral Value for Incentive Loan = $74,100,000
EXHIBIT 3 PROJECT SITE
ALL OF SECTION 19, SOUTH OF HWY 198, containing in the aggregate 485 acres, more or less. THIS PORTION OF SECTION 19 IS LESS AND EXCEPT THE W1/2 OF THE W1/2 being 155 acres, more or less.
THE S1/2 and the E1/2 of the NE1/4 OF SECTION 20, containing 383 acres, more or less.
ALL OF SECTION 21, containing 452 acres, more or less. LESS AND EXCEPT LEVEE AND RIVER EROSION, containing 150 acres, more or less.
THE NW1/4 OF SECTION 22, LESS AND EXCEPT RIVER EROSION, containing 67 acres, more or less.
THE NE1/4 NE1/4 OF SECTION 29 WEST OF LEVEE containing 29 acres, more or less; and THE N1/2 OF SECTION 29 EAST OF LEVEE containing 166 acres, more or less.
THE N1/2 OF SECTION 30, containing in the aggregate 210 acres, more or less. THIS PORTION OF SECTION 30 IS LESS AND EXCEPT THE W1/2 OF THE NW1/4 containing 80 acres, more or less; AND ALSO LESS AND EXCEPT A PARCEL IN THE SE 1/4 SE 1/4 being 47 acres, more or less.
ALL OF THE ABOVE SECTIONS ARE IN TOWNSHIP 12 NORTH, RANGE 11 EAST of the Osceola District of Mississippi County, Arkansas.
Containing in the aggregate 1792 acres, more or less.
Ark. Code app TITLE 19 § 18